Cogent Comms (CCOI) AI Stock Analysis

• Market Cap: $1.94B
• Dividend Yield: 10.18%
• Average Volume (3M): 1.62M
• Price to Earnings (P/E): 102.8
• Beta (1Y): 0.41
• Revenue Growth: -6.64%
• EPS Growth: -569.94%
• Country: US
• Employees: 1,899
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): -1.21
• Shares Outstanding: 49,182,710
• 10 Day Avg. Volume: 1,648,708
• 30 Day Avg. Volume: 1,623,926
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.39
• Enterprise Value/Revenue: 4.64
• Enterprise Value/Gross Profit: 13.86
• Enterprise Value/Ebitda: 28.16
• 1Y Price Target: $45.20
• Price Target Upside: 14.37% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 50 Neutral
• Price Target: $40.00 ▲(1.21% Upside)

Cogent Comms' overall stock score reflects significant financial challenges, including high leverage and declining revenues, which are partially offset by operational improvements and a high dividend yield. Technical indicators suggest potential short-term volatility, while the earnings call provides a mixed outlook with both growth opportunities and ongoing risks.

Positive Factors

Wavelength Revenue Growth

The significant growth in Wavelength revenues indicates strong demand and market penetration, supporting long-term revenue expansion and competitive positioning in the North American market.

EBITDA and Margin Improvement

Improvement in EBITDA and margins reflects operational efficiency and cost management, which can enhance profitability and cash flow sustainability over the long term.

IPv4 Leasing Revenue Growth

The growth in IPv4 leasing revenues highlights a successful diversification strategy and a strong market demand, contributing to stable revenue streams.

Negative Factors

High Leverage Concerns

High leverage poses a risk to financial stability and limits flexibility for future investments, potentially impacting long-term growth and operational resilience.

Revenue Decline

The decline in revenue, particularly in core segments, indicates challenges in maintaining market share and pricing power, which could affect long-term revenue growth.

Challenges in Data Center Sales

Challenges in data center sales suggest difficulties in monetizing assets, which may hinder revenue diversification and growth potential in the long run.

Cogent Comms Business Overview & Revenue Model

Company Description

Cogent Communications Holdings, Inc., through its subsidiaries, provides high-speed Internet access, private network, and data center colocation space services in North America, Europe, Asia, South America, Australia, and Africa. The company offers on-net Internet access and private network services to law firms, financial services firms, and advertising and marketing firms, as well as heath care providers, educational institutions and other professional services businesses, other Internet service providers, telephone companies, cable television companies, Web hosting companies, media service providers, mobile phone operators, content delivery network companies, and commercial content and application service providers. It also provides Internet access and private network services to customers that are not located in buildings directly connected to its network; and on-net services to customers located in buildings that are physically connected to its network. In addition, the company offers off-net services to corporate customers using other carriers' circuits to provide the last mile portion of the link from the customers' premises to the network. Further, it operates data centers that allow its customers to collocate their equipment and access the network. The company operates 54 data centers and provides facilities to 3,035 buildings and on-net services to 1,817 to multi-tenant office buildings. It serves primarily to small and medium-sized businesses, communications service providers, and other bandwidth-intensive organizations. Cogent Communications Holdings, Inc. was founded in 1999 and is headquartered in Washington, the District of Columbia.

How the Company Makes Money

Cogent Communications generates revenue primarily through the sale of Internet access and data services. The company's key revenue streams include monthly recurring charges from customers for bandwidth and connectivity services, as well as one-time setup fees for new installations. Cogent also earns revenue from colocation services, where customers pay for space and power within its data centers to house their servers and equipment. Additionally, strategic partnerships with other telecommunications providers and content delivery networks enhance its service offerings and expand its customer base, contributing to its overall earnings. The company's focus on providing competitive pricing and high-quality service helps retain customers and attract new business, further solidifying its revenue model.

Cogent Comms Financial Statement Overview

Summary

Cogent Comms faces significant financial challenges, including declining revenues, high leverage, and negative profitability. While there are some operational efficiencies and improvements in free cash flow, the overall financial health is concerning, with risks stemming from high debt levels and negative returns.

Income Statement

Cogent Comms shows a declining revenue trend with a negative revenue growth rate of -1.40% TTM. The company has struggled with profitability, evidenced by negative net profit and EBIT margins. However, the gross profit margin remains relatively stable, indicating some operational efficiency. The EBITDA margin is positive, suggesting potential for operational improvements.

Balance Sheet

The balance sheet reveals high leverage with a debt-to-equity ratio of 49.18 TTM, indicating significant financial risk. The return on equity is negative, reflecting poor profitability relative to shareholder equity. The equity ratio is low, suggesting limited financial stability and high reliance on debt financing.

Cash Flow

Cash flow analysis shows a negative operating cash flow, indicating challenges in generating cash from operations. However, the free cash flow to net income ratio is positive, suggesting some ability to cover net losses. The free cash flow growth rate is positive, indicating some improvement in cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.00B	1.04B	940.92M	599.60M	589.80M	568.10M
Gross Profit	335.84M	394.27M	396.69M	371.45M	363.46M	348.95M
EBITDA	165.24M	161.29M	1.56B	208.43M	201.08M	190.47M
Net Income	-216.28M	-204.07M	1.27B	5.15M	48.19M	6.22M
Balance Sheet
Total Assets	3.27B	3.17B	3.21B	1.01B	984.56M	1.00B
Cash, Cash Equivalents and Short-Term Investments	306.73M	198.49M	75.09M	223.78M	319.61M	371.30M
Total Debt	2.67B	2.34B	1.83B	1.36B	1.26B	1.21B
Total Liabilities	3.22B	2.95B	2.60B	1.53B	1.36B	1.29B
Stockholders Equity	46.67M	222.85M	609.56M	-518.63M	-373.10M	-293.17M
Cash Flow
Free Cash Flow	-233.02M	-203.64M	-112.29M	94.74M	100.34M	84.37M
Operating Cash Flow	-13.38M	-8.64M	17.34M	173.71M	170.26M	140.32M
Investing Cash Flow	-119.64M	21.49M	76.73M	-78.97M	-69.92M	-55.95M
Financing Cash Flow	10.62M	105.92M	-257.85M	-144.85M	-140.82M	-116.00M

Cogent Comms Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 39.52
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CCOI, the sentiment is Neutral. The current price of 39.52 is above the 20-day moving average (MA) of 37.66, above the 50-day MA of 39.25, and below the 200-day MA of 54.38, indicating a neutral trend. The MACD of 0.35 indicates Negative momentum. The RSI at 55.18 is Neutral, neither overbought nor oversold. The STOCH value of 73.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CCOI.

Cogent Comms Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IDT	79 Outperform	$1.58B	16.51	―	0.35%	1.91%	169.96%
IRDM	68 Neutral	$1.87B	17.63	23.89%	3.23%	7.56%	38.78%
LBTYA	62 Neutral	$3.99B	-1.05	-25.55%	―	3.53%	3.23%
WOW	60 Neutral	$441.40M	-6.55	-28.16%	―	-8.67%	63.35%
TDS	55 Neutral	$4.05B	-39.28	-0.82%	0.43%	-5.62%	80.09%
CCOI	50 Neutral	$1.94B	102.75	-93.59%	10.18%	-6.64%	-569.94%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

Cogent Comms Corporate Events

Cogent Comms Announces Leadership Change in Sales

On August 11, 2025, Cogent Communications Holdings, Inc. announced the upcoming retirement of James Bubeck as Vice President of Global Sales and Chief Revenue Officer, effective September 2, 2025. Mark Andrew Harris, who joined the company in 2023 following its acquisition of Sprint Communications, will assume the role, potentially impacting the company’s sales strategy and market presence.

Cogent Comms Announces New Financial Obligation

The news release from Cogent Comms lacks specific information about the company’s industry, products, or market focus. The release references internal document items without providing substantial details about the company’s operations or strategic implications, leaving stakeholders without clear insights.

Cogent Comms Prices $600M Senior Secured Notes

On June 3, 2025, Cogent Communications Holdings, Inc. announced that its subsidiaries have priced an offering of $600 million in senior secured notes due 2032, with an interest rate of 6.500%. The proceeds from the offering will be used to redeem existing notes due 2026 and for general corporate purposes. The offering is expected to close on June 17, 2025, subject to customary conditions, and highlights Cogent’s strategic financial management to optimize its debt structure.

Cogent Comms Announces $600M Senior Secured Notes Offering

On June 2, 2025, Cogent Communications Holdings, Inc. announced that its subsidiaries, Cogent Communications Group, LLC and Cogent Finance, Inc., plan to offer $600 million in senior secured notes due 2032 through a private placement. The proceeds from this offering are intended to redeem existing $500 million senior secured notes due 2026 and for general corporate purposes. The issuance aims to strengthen Cogent’s financial position by reducing its consolidated leverage ratio, which would be adjusted to 4.24x post-offering, enhancing its market competitiveness.